Foreclosed properties stiffing homeowner, condo associations

An ironic twist on the foreclosure problem: What if the banks that repossess all those houses and condos for non-payment are none-too-strict about making their homeowner and condo association payments?

That seems to be a widespread problem in Florida, according to a survey of associations released this week. Here's a snippet:

Nearly two-thirds of survey participants said that banks and mortgage lenders now holding title to the foreclosed units or homes currently are not meeting their legal obligation to pay fees or other assessments owing to the association

Survey respondents cited issues such as electricity and water shut-off to vacant units or homes, pools left unattended, mold and pest control. As one concerned property owner asked: “What will happen during the hot, humid summer months? I'm very worried about mold problems and will be asking our Board to take on the electric charges for the health of the buildings.”

Read the whole thing here if you wish: Download fl_comm_assoc_mortgage_foreclosure_survey__final_report59.doc

Comments

[k]

...my lawdar just went off.

OK, so if the banks are not honoring their deeded obligations, can't the HOA foreclose on the bank? (yeah yeah, I know what a legal quagmire that would be)

[Fuzzy Bear]

I served at one time as a director and treasurer for a large HOA with a budget that exceeded one million.

If an HOA wants to collect, they must follow the proper legal procedure for filing liens, forclosure notices, etc. in order to collect on past dues owed.

Many HOA's do not follow the proper legal procedures and often lose on their attempt to collect past dues My advice, hire an attorney with specific knowledge in collecting past HOA fees.

[Tino]

This is an easy one. As the treasurer of a 250-unit condo association, we would continue to lien the unit and move to foreclose on the new owner, which in this case is the bank.

While the bank would never let it go this far, in theory, since the unit no longer has a mortgage (the bank now owns it free and clear) a condo association could take title to the property in a foreclosure auction and then sell it for whatever it is worth.

Any HOA that allows the fees to pile up and not lien the property should be ashamed....In our Single Family Home Neighborhood the Deed Restriction Committee (AKA Hitler Youth) fine you for any Deed Restriction Violations, if you don't pay within a certain time period they file a lien that stays there until time to close, to transfer a clear title, the lien must be paid. The Bastards also charge every property owner $100 (before they close) for a form the title company uses to assure clear title with no HOA liens. Just one more price to pay to live in a Deed Restricted Community!

[Steve]

Under Florida law, the banks are actually protected from the HOA's... I believe they are only liable for "up to" six months of HOA payments.

However, if the bank actually holds the title to the home, that protection may not be valid any longer.